Sorry, I just noticed the video. I guess the last time I visited this subforum was a few weeks ago.

Thanks, I will have a look at some point and post comments

By the way, I have posted the first f lecture about Islam's history and contemporary issues in the main forum. I found it fascinating! You may want to watch it and post related comments. it is long, but I intent to leave it there for quite some time before posting the second lecture.

Okay. I heard the first one and I was impressed! Of course, now I have to find time to read more about this "Lucas effect" , but even with my limited knowledge in economic theories, I think I get the gist of what he is saying!

Germany rich was only possible precisely because other countries were not doing the same at the same time.Now Germany and the EC want everyone else in Europe to be more German: another fallacy ofcomposition that cannot work. As Martin Wolf put it beautifully, “Is everybody supposed to runcurrent account surpluses? If so, with whom—Martians?

Germany rich was only possible precisely because other countries were not doing the same at the same time.Now Germany and the EC want everyone else in Europe to be more German: another fallacy ofcomposition that cannot work. As Martin Wolf put it beautifully, “Is everybody supposed to runcurrent account surpluses? If so, with whom—Martians?

Wow, the whole book online.

But then for the Lucas critique and Kalecki's bug there is one word the debug the system, productivity.

There is a lot what Blyth says, so take your time. The austerity part is the easy one, really.

_________________The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt

okay, I love this guy! A couple of months ago I would have +rep you, but I have developed a new attitude of not wanting to participate in a game when some of the most blatant racist posters in this forum have insanely high +rep scores...As for the video itself, I like that he has the capacity to think out of the box and the fact that he takes complicated economic issues and pinpoints key points without inserting confusing details.

Now, talking about specifics in a random order as I can partially recall them right now...

His idea regarding how to handle the problem of robots is something that finds me in total agreement. In fact, at some point I made a similar argument about a possible need to reduce full time shift from 8 hours, which is today, to a considerable lower level (viewtopic.php?f=5&t=17986&p=264088&hilit=8+hour#p264088)

His explanation about the issues with Keynesian politics which led to crisis in the 1970s makes sense. Without having an economic background, my instinct (and reasoning) led me to a similar in some sense conclusion in the following thread viewtopic.php?f=5&t=8628&p=103482&hilit=unemployment#p103482Of course, there is always a question regarding mistakes of gross simplifications of complicated economic issues. For example, I can understand how inflation and economic crisis can come out of Keyne's policies, but it is not this obvious why inflation continued to be an issue AFTER the start of the crisis and when there was high unemployment. I will have to watch that section again...

I agree with his views regarding view. They seem logical. He seems to be pro European but anti-Euro (currency-wise) at least for the less competitive economies . His explanations make sense! But there was one point I was not sure if I could accept it or not. At some point, he says that a country like France is forced by the current monetary policies and common currency to accept a continuous contraction of its economy in order to address its permanent deficits. But, according to him, if France has its own currency, it will have the option of devaluating its currency in order to make itself more competitive. Okay! But what happens to the economy when a country devaluates its currency ? Is not it similar to contracting the economy? In other words, it is not clear to me what options are more appropriate for a nation like France? Is it better to have a strong currency and accept a certain percentage of its economy being used to serve the constant presence of a deficit instead of generating wealth and employment for the people? Or is it better to not have a deficit but accept the presence of a weak currency which will reduce consumption as imports will become less affordable? Reduction of consumption is by itself a sign of people having less wealth and can also create unemployment. On the other hand, we know from historical experience (communism) that weak currency does not necessarily mean more unemployment.

Anyway, I will go over the video again. As you said, there is a lot to digest...

Well, I kind of knew that you pallikari would like the Sottish accent and logic.

But this thing I don't completely agree.

pamak wrote:

His explanation about the issues with Keynesian politics which led to crisis in the 1970s makes sense.

Increase of productivity should have been enough to solve the problem of increasing wages without inflation. But as Lucas critique says, everyone was gaming the system. But this didn't cause the inflation in the 70's, it was Nixon's decision to pay the Vietnam war with inflation and oil crisis 1973.

We can elaborate this further, if you desire.

_________________The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt

Well, I kind of knew that you pallikari would like the Sottish accent and logic.

But this thing I don't completely agree.

pamak wrote:

His explanation about the issues with Keynesian politics which led to crisis in the 1970s makes sense.

Increase of productivity should have been enough to solve the problem of increasing wages without inflation. But as Lucas critique says, everyone was gaming the system. But this didn't cause the inflation in the 70's, it was Nixon's decision to pay the Vietnam war with inflation and oil crisis 1973.

We can elaborate this further, if you desire.

Okay, I understand the point regarding the oil crisis and the Vietnam war. I have also read about their effects on inflation, Both are examples of what I mentioned earlier regarding possible gross simplifications of really complex economic issues. On the other hand, the idea that stronger unions can get biggest returns for the majority of the population which in turn can drive prices up and create inflation makes sense to me. The increase of productivity may not be capable to control inflation because most of the products of this increased productivity end up in foreign markets (exports) instead of the US market. So, in broad terms I see the following structure in 1970s. There is increased productivity. A large part of it is destined for the rest of the world. "Made in the USA" products dominate foreign markets. These increased exports bring higher profits and strong unions have the power to demand a bigger part of these profits. So. the working class enjoys higher wages.

At the same time. the number of new products destined for the domestic US market is not numerous enough to counter the increased wages, and this imbalance brings inflation. In fact, we even have examples to show that when increased production was threatening profits by having too many products in domestic markets, measures were taken to control the quantity of the available domestic products. See for example the destruction of excessive agricultural products. I understand that this example is not related to the industrial sector, but it shows that manufacturers are always aware of the threat of eroding prices as a result of increased production. Of course, the difference between agriculture and industrial products is that the former are perishable and you do not have the option to keep them in warehouses for long time to reduce the supply, so producers often had only one option: to destroy excessive products in order to keep agricultural prices at a constant level.

But yes, I also get the feeling that he oversimplifies economic issues and perhaps it is better to see the increased strength of unions at the time as a factor which simply contributed to higher inflation among other factors, such as, the one you mention.

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